FILE PHOTO: An American Airlines Boeing 737 Max 8, on a flight from Miami to New York City, comes in for landing at LaGuardia Airport in New York

By David Shepardson

WASHINGTON (Reuters) - American Airlines Group Inc <AAL.O> and Southwest Airlines Co <LUV.N> are bumping thousands of passengers off airplanes after their Boeing 737 MAX fleet's was grounded in mid-March following two fatal crashes.

The Federal Aviation Administration reported Thursday that American denied seats to 69,924 passengers voluntarily in the first six months of 2019, up from 28,409 in the same period last year, while involuntarily denying boarding to 5,022 passengers, up from 678 in the same period last year.

Southwest denied seats to 22,364 people voluntarily through June, compared with 10,364 in the first half of 2018, while it involuntarily denied boarding to 2,525, up from 1,045 in the first six months of 2018.

The FAA noted the airlines told the agency "the grounding of the 737 MAX aircraft has negatively impacted their involuntary denied boarding statistics."

American Airlines spokesman Ross Feinstein said the airline's "biggest challenge in the operation continues to be out of service aircraft. This reduces our ability to start the day right and to swap aircraft when needed as the day goes on."

American has canceled about 115 daily flights into early November because of the ongoing grounding. It has been substituting other aircraft for its busiest flights while canceling others and temporarily suspending direct flights between Oakland, California, and Dallas-Fort Worth.

Some analysts have said they do not expect the MAX jets to fly again before the end of the year. American, with 24 of the 737 MAX aircraft and dozens more on order, is scheduling without the jets through Nov. 2.

Southwest has removed the aircraft from its scheduling through Jan. 5, 2020 and last month said it was ending operations at Newark Liberty International airport.

Southwest said in a statement that it does not oversell flights but that "there were times that we had to down gauge a 175-seat MAX to our 143-seat 737-700 or try and accommodate customers on already-full flights."

The 737 MAX was grounded worldwide in March after an Ethiopian Airlines plane plunged to the ground soon after take-off, five months after a similar Lion Air fatal crash off the coast of Indonesia.

Boeing <BA.N> hopes a software upgrade and new pilot training will add layers of protection to prevent erroneous data from triggering a system called MCAS, which was activated in both the planes before they crashed. Boeing hopes to conduct a certification test flight in the "September time frame," a key step before the FAA can unground the planes.

(Reporting by David Shepardson in Washington Additional reporting by Traci Rucinski in Chicago; Editing by Steve Orlofsky)